Jeff Zucker’s Telegraph Buyout Likely Dead as UK Government Moves to Block Sale

Jeff Zucker’s bid to buy the UK’s Telegraph Group is all but dead after Prime Minister Rishi Sunak set out plans to change the law to prevent foreign states from buying British news outlets.

Zucker, the CNN chief, is now CEO of media investment firm RedBird IMI, which is backed by an Abu Dhabi fund controlled by UAE Vice President Sheikh Mansour bin Zayed al-Nahyan — who also owns the Manchester City football club.

Their attempted $1.4 billion take over of the conservative newspaper and its sister publication, The Spectator magazine, generated “fierce resistance” from Britain’s Conservative party, The Financial Times reported. The publications have longstanding ties with the country’s right, with the paper nicknamed the “Torygraph” for its longstanding support for Conservative views.

Sunak on Wednesday moved to change the law to bar such a sale, which the FT said “will delight some executives at the Telegraph and Spectator” who opposed the idea of foreign ownership.

“We will amend the media merger regime explicitly to rule out newspaper and periodical news magazine mergers involving ownership, influence or control by foreign states,” Stephen Parkinson, the culture minister in the House of Lords, said Wednesday, Reuters reported. After being proposed to the Lords, the measure must go to the House of Commons for a vote, which will take place in two weeks.

RedBird IMI told Reuters it was extremely disappointed and would now evaluate its next steps, but declined to comment to TheWrap.

Zucker has argued that RedBird IMI is not a sovereign wealth fund controlled by the government, but has not fully explained where the money comes from.

The tussle over the deal put Zucker up against Andrew Neil, a former Sunday Times editor and BBC presenter who now chairs The Spectator, Semafor reported.

Zucker, speaking on “The News Agents” podcast, called Neil “quite the hypocrite” for opposing the deal after he earlier approached RedBird about a job as the combined chairman of The Telegraph and The Spectator. “We said no thanks, and ever since that day he’s been one of our most vocal critics,” Zucker said. “Gimme a break.”

Neil’s version painted the situation differently, Semafor reported, as big American money trying to walk all over the British way of doing things. ““When Zuckie came on the scene we were dealing with someone who was ignorant of Britain, British media and British newspapers/magazines and was basically a front for Arab money,” Neil said in an email to Semafor’s Ben Smith. “We didn’t know he was also a liar. Now we do.”

Zucker attempted to allay concerns put forth by UK Culture Minister Lucy Frazer earlier this year by tweaking the deal with the Barclay Family, the longtime owners of the Telegraph Group, which was nearly forced to auction the publications off thanks to $1.5 billion in debt owned to Lloyds. RedBird bailed them out on that debt last year.

He reportedly even offered to keep RedBird’s ownership stake below 50% and give up operational control to appease lawmakers, but that fueled belief that “the real motive for this bid is not operational but to acquire influence via a significant stake in the national press,” Spectator Editor Fraser Nelson wrote.

Nevertheless, the deal was still under investigation to gauge its impact on freedom of expression and accuracy, Reuters reported. Frazer was handed a report Monday prepared by Britain’s Competition and Markets Authority on the proposed takeover and she was expected to have final say on the sale.

Around 100 lawmakers wrote to Frazer warning of the potential down side of any sale to RedBird IMI.

“The free press is a key pillar of our democracy,” the letter said. “If major newspaper and media organizations can be purchased by foreign governments, the freedom of the press in the UK has the potential to be seriously undermined.”

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